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juansantos3328
24.12.2020 •
Business
Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,800 and an estimated useful life of 8 years. (1)Determine the (a) depreciable cost for straight rate, (b) straight-line rate, and (c) annual depreciation for the straight line rate (d) double declining balance depreciation amount for 1st year (2) Journalize the sale of the equipment at the end of the 4th year for $20,000 cash, if using the straight line rate.
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Ответ:
a) Depreciable cost = $61,200
b) Straight-line rate = 12.5%
c) Annual depreciation for the straight-line rate is:
$7,650.
d) The double-declining balance depreciation amount for the 1st year is:
$15,300.
e) Journal Entry of sale of equipment at the end of the 4th year for $20,000, using the straight-line rate:
Debit Sale of Equipment $65,000
Credit Equipment $65,000
To record the transfer of the equipment account.
Debit Accumulated Depreciation $30,600
Credit Sale of Equipment $30,600
To record the transfer of accumulated depreciation to the account.
Debit Cash Account $20,000
Credit Sale of Equipment $20,000
To record the cash received from the sale.
Debit Profit and Loss Account $14,400
Credit Sales of Equipment $14,400
To record the loss on sale of equipment.
Explanation:
a) Data and Calculations:
Cost of computer equipment = $65,000
Estimated residual value = 3,800
Depreciable value = $61,200
Estimated useful life = 8 years
Annual depreciation expense = $7,650 ($61,200/8) or $61,200 * 12.5%
Depreciable cost = $61,200 ($65,000 - $3,800)
Straight-line rate = 12.5% (100%/8)
Double-declining rate = 12.5% x 2 = 25%
Depreciation amount for the 1st year = $15,300 ($61,200 * 25%)
Book value of asset at the end of the 4th year, straight-line method:
Cost of equipment = $65,000
Accumulated Depreciation = $30,600 ($7,650 * 4)
Book value = $34,400
Sales proceed = $20,000
Loss on sale of asset = $14,400 ($34,400 - $20,000)
Ответ:
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Explanation: